Monthly Archives: June 2008

Yet Another Reason Not to Sell Your Berkshire Hathaway Shares

Posted on June 4, 2008 by Felix

This is almost certainly the wost investment in Berkshire Hathaway of all time – or, on the flipside, "a pretty unethical way to make a buck". Either unethical or extraordinarily lucky, anyway. Someone, somewhere, for some reason, had a bid … Continue reading →

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Just How Big Was Lehman’s Buyback?

Posted on June 4, 2008 by Felix

Was I too hasty in being nice about the WSJ reporting on Lehman’s stock buyback? I said that in the absence of any evidence to the contrary, one should probably take the WSJ’s assertion that the buyback was "large" at … Continue reading →

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Extra Credit, Wednesday Edition

Posted on June 4, 2008 by Felix

Why is diesel even more expensive than gas? "Next time we notice that diesel prices are a dollar more a gallon than gas prices, instead of wondering why diesel is so expensive, maybe instead we should breath breathe a sigh … Continue reading →

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Trusting the WSJ

Posted on June 4, 2008 by Felix

Lehman Brothers bought back its own shares yesterday, in a move which shocks Yves Smith and worries Barry Ritholtz. But how do they know that Lehman bought back its own shares? The bank made no public announcement to that effect. … Continue reading →

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Want a Cheaper Mortgage? Talk to People!

Posted on June 4, 2008 by Felix

Harvard’s Cassi Pittman has written a heartbreaking paper detailing the results of a series of interviews with black homebuyers in Atlanta. It turns out that if you want to know whether someone’s likely to have taken out an unsuitable or … Continue reading →

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Who Might Buy Lehman?

Posted on June 4, 2008 by Felix

Peter Eavis and David Reilly are thinking along the same lines as me: Lehman Brothers should be sold. But then we part company, for the WSJ writers’ shortlist of potential acquirers is deficient in the only think which matters right … Continue reading →

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Google’s Top 10 Universities

Posted on June 4, 2008 by Felix

Vanity Fair has a wonderful oral history of the internet, full of real gems. About 11,000 words in, we get to Google’s Larry Page: One of the first things we did was just understand the relative importance of things. It … Continue reading →

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Return of the SIV

Posted on June 4, 2008 by Felix

Remember last summer, when everybody got very excited about SIVs? (SIV, if you don’t recall, stands for "borrow short, lend long, move everything off-balance-sheet, and pray liquidity doesn’t dry up".) There was a lot of smoke and noise, and eventually … Continue reading →

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Lehman and the Exploding Hedge

Posted on June 4, 2008 by Felix

According to Susanne Craig, Lehman CFO Erin Callan "receives a slimmer daily financial summary than her predecessors, relying more on data from the trading-floor contacts built during her 13-year Lehman career". I wonder when and how she found out about … Continue reading →

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A Year Ago, They Barley Cared

Posted on June 3, 2008 by Felix

One of the advantages of living in Europe is you get to read the Wall Street Journal’s much smaller European version. Where, clearly, the headline writers have been thinking rather too much about food inflation. (Click to see a larger … Continue reading →

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Free Dan Ariely!

Posted on June 3, 2008 by Felix

I just got around to reading Aditya Chakrabortty’s account of going shopping with Dan Ariely: Three Chinese-origin boys are motoring down the aisle, their trolley stacked high with cheese-and-tomato spaghetti ready meals. They are engineering students. "Did your parents teach … Continue reading →

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Extra Credit, Tuesday Edition

Posted on June 3, 2008 by Felix

Ahmadinejad Says Oil Is Plentiful, Dollar Artificially Weakened: "Powerful and international capitalists” are working "mendaciously to pursue their political and economic aims". And that’s why oil’s so expensive. On the other hand, I’m pretty sure that Ahmadinejad hasn’t been reading … Continue reading →

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Kinko’s, RIP

Posted on June 3, 2008 by Felix

I guess they’re really serious about this integration thing. When high-end, business-friendly FedEx bought low-end, consumer-unfriendly Kinko’s, it paid $891 million for that hugely valuable (ahem) Kinko’s brand. Which it’s now jettisoning, writing off that $891 million in the process. … Continue reading →

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Bill Miller Datapoint of the Day

Posted on June 3, 2008 by Felix

From Evan Newmark: Miller’s Value Trust Fund, Legg Mason’s flagship, just passed another milestone. As of the end of May, according to Morningstar, the fund is now underperforming the S&P 500 over a 10-year period. This isn’t (only) a how-the-mighty-are-fallen … Continue reading →

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Why Young Savers Should Borrow Money to Invest in Stocks

Posted on June 3, 2008 by Felix

Many thanks to an anonymous commenter on my last blog for pointing me to a very provocative piece of research from Ian Ayres and Barry Nalebuff, entitled "Life-Cycle Investing and Leverage: Buying Stock on Margin Can Reduce Retirement Risk". They … Continue reading →

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Clare College, Financial Speculator

Posted on June 3, 2008 by Felix

Cast your mind back, if you will, to those halcyon days of early 2007, when credit was easy and equities looked attractive. Back then, an aggressive investor might well have locked in low long-term borrowing costs and invested the proceeds … Continue reading →

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Annals of Dubious Branding, Audi Edition

Posted on June 3, 2008 by Felix

Kit Roane doesn’t belabor the irony, but I can’t resist: Tanya Mastoloni went a step further, buying a 49cc scooter to replace her Audi Allroad Wagon. "It goes about 150 miles on one gallon of gas," she says, noting that … Continue reading →

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Is Libor Dead?

Posted on June 3, 2008 by Felix

It’s time to hoist Henri Tournyol Du Clos from the comments; he’s always insightful, but what he said about Libor last night is particularly spot-on: The problem is that unsecured fixed rate interbank lending is an activity that firmly belongs … Continue reading →

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Lehman and the Failed Hedges

Posted on June 3, 2008 by Felix

It looks as though Lehman Brothers is going to lose money in the second quarter. That’s partly because the second quarter, for banks, includes March, which was a particularly brutal month in the capital markets. But it’s also because the … Continue reading →

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Extra Credit, Monday Edition

Posted on June 2, 2008 by Felix

In Escondido: Buy one (house), get one free Looking for Wachovia’s Next Chief Executive: Unfortunately, it’s probably not going to be the magnificently-named Benjamin P. Jenkins III. The Human Hands Behind the Google Money Machine The gods of greed: A … Continue reading →

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Credit Crunch Silver Linings, Student Loan Edition

Posted on June 2, 2008 by Felix

Apparently Citibank, along with many other lenders, is moving out of the student-lending business, at least for some smaller schools. Good. Let’s move student lending back into the hands of the government, where it belongs.

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Cap-and-Trade vs Fuel Efficiency Requirements

Posted on June 2, 2008 by Felix

This is one of the silliest arguments I’ve yet seen against cap-and-trade: Although the transportation sector represents around 35 percent of the nation’s carbon emissions, oil companies and refiners — which fuel that sector — would be granted just 4 … Continue reading →

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Chart of the Day: Rail Freight

Posted on June 2, 2008 by Felix

Paul Krugman notes one way in which the US seems to be well ahead of the EU: it moves much more of its freight by rail. He gives a lot of good reasons for this (Europe’s got more coastline and … Continue reading →

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A Brief History of Bill Gross’s Picture Byline

Posted on June 2, 2008 by Felix

Things were sunny in Newport Beach until September 2006. Up to that date, Bill Gross’s monthly Investment Outlooks carried a colorful photo, complete with trademark moustache: The following month, however, the photo had turned B&W, and the moustache was gone … Continue reading →

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Whither WaMu’s Killinger?

Posted on June 2, 2008 by Felix

There were just 24 days between Ken Thompson losing his chairmanship of Wachovia and his being fired by the board. At that rate, Kerry Killinger of WaMu, who lost his chairmanship today, is likely to be fired on June 26. … Continue reading →

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